Dec 2, 2011
Super Committee Letdown–Why We Think It Failed
Consider This…
Well, we predicted it would go out with not a bang, not a whimper, but something in between. And boy, were we ever wrong.Last Tuesday, two days before Thanksgiving, the Super Committee issued a statement that began, “After months of hard work, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.” No deal to cut the deficit –by even one dollar!
So what happened? We believe it was a combination of things but the primary reason is that the consequences of failure – the automatic $1.2 trillion in cuts – don’t actually kick in until after the election on January 1, 2013. Congress operates a lot like your typical college student – the work doesn’t get done until the final hour. Witness this summer’s debt ceiling debate.
So what comes next? Some want to wriggle out of the automatic cuts, particularly the $600 billion that are due to come out of defense. The President has said in no uncertain terms that he will not agree to that. Others are getting to work trying to figure out how to get to the $1.2 trillion in deficit reduction before the automatic cuts take effect in 2013. This will be the Washington drama of 2012 and frankly, we’re a little exhausted just thinking about it. As always, we’ll keep you up-to-date.